Student Finance Plc & Student Roost Investor Presentation Update
Sections 1. Executive Summary 4 2. Management Team 6 3. Portfolio Overview 8 4. Financial Covenants 12 5. Operational Update 14 6. Summary 21 Appendix: Financial Calendar and Contacts 2
SECTION 1 – EXECUTIVE SUMMARY
1.1 Executive Summary 1. Solid financial performance 2. Internalisation of operations on track through rebrand and changes in management 3. Capital expenditure investment continues 4. Financial covenants satisfied 5. Group portfolio continuing to grow 4
SECTION 2 – MANAGEMENT TEAM
2.1 Management Team Executive Team Nathan Goddard – Chief Executive Officer • Nathan has over 20 years of industry experience and was previously Chief Operating Officer at Student Roost • Previously held senior roles at Student.com, Greystar and Unite Jeannie Wong (1) – Chief Financial Officer • Jeannie is a Chartered Accountant with over 10 years’ experience in real estate and finance roles • Has been with Student Roost since June 2017; will return to Brookfield as Portfolio Manager for Student Roost once Jonathan Hire joins the business Paul Inglett – Chairman • Paul was previously the Chief Financial Officer at Center Parcs for 7 years and Group Finance Director at Marston’s plc for 8 years • Also acts as an Advisor to Brookfield on other Property company investments Board of Directors Tim Butler – Founder & Chief Strategist; formerly CEO of Student Roost with over 20 years experience in the sector Brookfield Representatives • Zachary Vaughan – Managing Partner of Brookfield Property Group and is Head of Brookfield’s European real estate investments group; 20 years’ experience in the real estate sector • Kevin McCrain – Managing Director of Brookfield Property Group and is responsible for advising on all legal aspects of Brookfield’s real estate platform, specifically focusing on European acquisitions and dispositions • Brad Hyler – Managing Director of Brookfield Property Group and is responsible for leading Brookfield’s European real estate group’s business development efforts in Europe • Natalie Adomait – Vice President of Brookfield Property Group and is involved in the Asset Management for Brookfield’s European real estate investments 6 (1) Jonathan Hire will be the future CFO and will join Student Roost in July 2018. Jonathan is a Chartered Accountant with extensive finance experience; his current role is the Group Financial Controller at Enterprise Inns plc
SECTION 3 – PORTFOLIO OVERVIEW
3.1 Student Finance Plc Portfolio Overview Key Portfolio Overview • Newcastle University co- investing in one of the UK’s Newcastle largest regeneration projects • 1 Property 97.3% of beds located in cities • 24 acre £350m Science Central in construction 371 Beds with at least two Universities, of • £200m multi-use Kings Gate Building which one is a top 30 ranked institution • State of the art £81m Diamond building for engineering Sheffield • students and staff The properties are located on 2 Properties average less than 15 minutes’ • UoS invested over £100m in a new Arts & Humanities 1,512 Beds facility / other building refurbishments walk from either town centre or the nearest university campus • £200m investment in Jubilee Campus Nottingham • Note that the Student Finance • Plans for further £200m investment over next 10 years to 2 Properties Plc portfolio is part of the wider double number of engineering students 1,796 Beds Student Roost Group portfolio, • NTU invested over £250m over last decade which is currently sized at over 16,500 (1) beds to date • UoL invested £42m sciences facility, the largest Leicester investment in medical teaching 7 Properties • DMU undergoing £136m campus transformation including 1,849 Beds new property and refurbishments • Glyndwr University have released a 5 year plan to double Wrexham the number of full-time graduates 1 Property • Developing relationships with overseas HE partners to 156 Beds forge stronger international links Total 13 Properties 5,684 Beds 8 (1) Excluding developments
3.2 Student Finance Plc Portfolio Characteristics Room Types • Student Roost offers a wide range of room types for students, catering to a broad spectrum of pricing points: ‒ Majority of rooms are ensuite or studios ‒ On average, there is a c.£64pw price range between the cheapest and most expensive offering in each university town or city Typical Tenancy Terms • Tenancies marketed in the 2017/18 academic year have an average length of c. 48 weeks (vs. 2016/17 – 47 weeks) • Rents are inclusive of utilities bills, internet and contents insurance • Offering an “all - inclusive” price represents a substantial advantage over the alternative HMO private sector Rolling Annual Agreements • In 2017/18, c.20% of beds within the portfolio are operated under rolling annual agreements with universities, education providers and other third parties ( vs. 2016/17 – c.11%) • Agreements are in place in all markets within the Student Finance Plc portfolio 9
3.3 Student Finance Plc Actual Performance Actual Performance: Year to December 2017 • Geographically diverse, modern portfolio with high levels of occupancy • The Student Finance Plc portfolio operated at 99% occupancy for the 2016/17 academic year • Of the 13 properties within the Student Finance plc portfolio, 10 properties were 100% occupied for the 2016/17 • Weighted average bed rent was marketed at £122 per week for 2016/17 • Achieved year-to-date December 2017 annual gross rental income and net operating income of £34.3m and £24.5m, respectively Year to December 2017 Avg. Weekly Occupancy Rent Avg. Tenure No. of % (1) (£pbpw) (1) (no. weeks) (1) Asset Market Beds Brookland Leicester 255 100% £ 128 48 Eastern Boulevard Leicester 80 100% £ 127 47 Newarke Leicester 284 100% £ 129 48 Queens Court Leicester 143 100% £ 86 48 Regents Court Leicester 182 100% £ 90 48 The Summit Leicester 369 100% £ 137 48 Upperton Road Leicester 536 100% £ 125 47 Nottingham Two Nottingham 1,096 100% £ 128 47 Trinity Square Nottingham 700 100% £ 128 47 Newcastle 1 Newcastle 371 91% £ 148 50 Sheffield 2 Sheffield 520 100% £ 104 48 Sheffield 3 Sheffield 992 99% £ 118 43 Snowdon Hall Wrexham 156 99% £ 67 42 Total Student Finance Plc Portfolio 5,684 99% £ 122 47 10 (1) Based on the academic year up to September 2017
3.4 Current Year Performance Current Year Performance • The Student Finance Plc is expected to deliver occupancy of 99% in 2017/18 academic year • Estimated bed rent per week for 2017/18 sold at 4-5% higher than 2016/17 rates AY 2017/18 No. of Occupancy Asset Properties % Brookland 100% Eastern Boulevard 100% Newarke 100% Queens Court 100% Regents Court 100% The Summit 100% Upperton Road 100% Nottingham Two 100% Trinity Square 100% Newcastle 1 99% 95% (1) Sheffield 2 97% (1) Sheffield 3 Snowdon Hall 100% Total Student Finance Plc Portfolio 13 99% 11 (1) Short-term occupancy impact of asset repositioning capital works taking place at Sheffield 3 in Q3 and Q4 AY 2016/17 and requirement to refurbish a number of flats in Q2 and Q3 AY 2017/18. AY 2018/18 leasing expected to return to normal with works completed
3.5 Student Roost Group Portfolio Highlights • Group Portfolio has grown from 5,600 beds across 5 regional Aberdeen markets to over 20,000 (1) beds located across 18 regional markets 976 beds (2) within a span of two years • Glasgow Current Student Finance bond security remains the originally charged 2,390 beds (6) Edinburgh 5,684 bed across 13 properties 331 beds (3) Newcastle AY 2017/18 194 beds (1) Belfast Durham No. of Occupancy Financing + 371 beds (1) 2,332 beds (5) 200 beds (1) Properties % Maturity Date Total Student Finance Plc Portfolio 13 99% Sep-24 York Follow On Investments 356 beds (1) Acquired in Sep-16 3 100% Mar-19 Acquired in Mar-17 13 99% Apr-19 Liverpool Sheffield Acquired in Feb-18 16 92% Jan-21 1,557 beds (5) 1,357 beds (3) Total Operating Assets 45 97% + 1,512 beds (2) Developments 7 n/a Nottingham Chester Total Student Roost Group Portfolio 52 164 beds (1) 736 beds (2) + 1,796 beds (2) Wrexham 156 beds (1) Historical Bed Evolution Leicester 25,000 Swansea 1,849 beds (7) 722 beds (2) 20,438 London 20,000 527 beds (1) Birmingham 3,858 16,580 1,392 beds (2) 15,000 No. of beds Bournemouth 5,571 454 beds (1) Southampton Bath Poole 283 beds (1) 104 beds (1) 308 beds (1) 10,000 4,172 5,684 At completion of under construction forward fund transaction 1,153 Assets included in the bond security 5,000 (x) Denotes no. of assets in city - Apr-16 Sep-16 Mar-17 Feb-18 Operating Developments Total Assets 12 (1) Including developments
SECTION 4 – FINANCIAL COVENANTS
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